Developing the young workforce: Scotland's youth employment strategy

Youth Employment: the strategy

Responding to recession

1. The Scottish Government placed an all-Government, all-Scotland response to rising youth unemployment at the top of its agenda from the onset of the economic downturn which followed the 2008 global financial crisis. This involved innovative approaches, based on the principle of early intervention, and wide ranging partnership working by national and local government, government agencies, the education community, training providers, employers and the third sector.

2. These include the introduction of the Opportunities for All commitment of an offer of an appropriate place in learning or training to all 16-19 year olds not already in employment, education or training, Youth Employment Scotland Fund ( YESF) which offers recruitment incentives to help employers employ young people, and Community Jobs Scotland which has provided over 5,000 job placement opportunities in a supportive third sector environment for young people.

3. Additionally, throughout the recession, the Scottish Government focused on the growth and development of the Modern Apprenticeship programme. The number of Modern Apprenticeship opportunities available each year has increased from over 21,000 starts in 2010/11 to over 25,000 in each of the last 3 years. Building on this success we have committed to a year on year increase to the annual number of new Modern Apprenticeships starts taking this to 30,000 per year by 2020.

4. Within the programme we have seen a number of successful initiatives to protect apprentices such as the Adopt an Apprentice scheme, which enabled apprentices to complete their training with a new employer if their current employer was unable to continue to employ them.

5. Critically, throughout this challenging period, we have maintained the employed status of Modern Apprentices in Scotland. This remains a fundamental element of our approach.

6. The Scottish Government prioritised provision for young people within college education throughout the recession. This, in the context of college regionalisation, has helped maintain and develop colleges' central position in our approach to developing the young workforce.

7. These and a range of other measures over the past 6 years represent our quick, strong and effective response to tackling youth unemployment. There is much to learn from what has been achieved. This is why we have continued to adapt, tailor and review our support, such as changing the eligibility of interventions including the Youth Employment Scotland Fund, to groups of young people facing the greatest disadvantages.

8. This strong track record for supporting young people into positive destinations shows that the powers we do have we have used well - an important point in the context of the debate about additional powers for our Parliament. We will continue to work across Government and with partners to make effective use of the powers and resources we do have to support those young people currently experiencing unemployment.

The improving economic picture

9. As we look ahead, we see improved labour market conditions underpinned by a strengthening economy. Nonetheless, our ambitions go much further than simply returning to pre-recession levels of youth unemployment.

10. The cost of youth unemployment is significant. Being unemployed while young can affect future earnings as average wages remain lower throughout the person's working life, even if the person is not unemployed again. It can also increase the chances of being unemployed again. Other consequences of being unemployed when young can emerge later in life, and include lower life satisfaction and happiness, poorer health, a higher risk of depression and lower job satisfaction. The longer the initial spell of unemployment, the greater the negative effect.

11. Although most young people do move into a positive initial destination after leaving school, there is a complex picture underneath this headline position, and one in which it is apparent that some groups of young people are particularly disadvantaged.

• Of the 77,000 who were unemployed during July 2013 to June 2014, 50,000 were not in full-time education ^[1] .
• 4 out of 10 young people who attain qualifications at SCQF level 3 or below become unemployed upon leaving school ^[2] .
• 32 per cent of employers recruit young people directly from education, 37 per cent offer work experience placements and 12 per cent offer formal apprenticeships. ^[3]
• While 7 out of every 10 female school leavers remain in education after leaving school, they tend to cluster into specific subject areas, reflecting the wider occupational segregation seen in the labour market.
• Young people from Scotland's black and minority ethnic communities embark on a narrower range of pathways than young people from the population as a whole and are more likely to experience unemployment ^[4] . Allied to this, young people from minority ethnic groups represent less than 2 per cent of all Modern Apprenticeship entrants ^[5] even though they represent 6 per cent of all young people ^[6] .
• Half of all young people with a declared or assessed disability are in further education 9 months after leaving school. However, by the time they are 26 they are four times as likely to be unemployed as their non-disabled peers ^[7] .
• Looked after children are least likely to go into a positive destination after leaving school - 1 in 3 is unemployed 9 months after leaving school ^[8] .

12. It is through tackling these challenges that we will impact significantly on the underlying structural youth unemployment issues Scotland faces, as well as impacting positively on the inequalities many young people experience when they do move into the labour market.

13. In addressing these issues it is essential that we align new approaches with those parts of the labour market where employment opportunities exist and are emerging at a local, regional and national level. The programme of implementation seeks to address the equality challenges our young people face while contributing to short, medium and long term economic growth.

14. Our commitment, therefore, is to continue to focus concerted action permanently and significantly to reduce youth unemployment and in doing so to address the inequalities different groups of young people experience as they seek to move into the workforce.

15. We are also committed to working in partnership with employer representatives from all sectors across Scotland and trade unions to promote positive working relationships in the work place. One of our first responses to the ' Working Together Review', chaired by Jim Mather was to establish a Fair Work Convention. This stakeholder body will provide leadership on Scottish Industrial relations and promote the principles behind Fair Work.

16. In November 2014 the Fair Work, Skills and Training portfolio was created to reflect the strategic importance of these policy areas to the overall economic ambition of Scotland. We are aiming to create a stronger, fairer and more resilient economy that supports a better balance of growth. We want growth that is evenly distributed across different regions of Scotland and whose benefits are widely shared. That is why equality and social justice are an important part of the Scottish Government's vision for a strong economy.

The Commission for Developing Scotland's Young Workforce

17. In establishing the Commission for Developing Scotland's Young Workforce, the Scottish Government asked it to consider:

• How a high quality intermediate vocational and education and training system, which complements our world class higher education system, can be developed to enhance sustainable economic growth with a skilled workforce;
• How to achieve better connectivity and co-operation between education and the world of work to ensure young people at all levels of education understand the expectations of employers, and that employers are properly engaged;
• How to achieve a culture of real partnership between employers and education, where employers view themselves as co-investors and co-designers rather than simply customers.

18. The Commission published its final report, Education Working For All! ^[9] , in June 2014, in which it highlighted the need for concerted action to tackle structural and recurring youth unemployment. Its recommendations span the education and training system and call for more effective joint working between schools, colleges, training providers and employers. The aim must be to provide the best possible blend of learning for young people to equip them for work.

19. Importantly, the Commission highlighted the need for markedly different attitudes to options and qualifications which are of a more vocational nature.

20. The Commission's report contains stretching targets, to lead us to a sustained reduction in youth unemployment levels to those of the best performing European countries. The report received widespread support from Scotland's education and employer communities, from organisations representing young people and parents, and from across the political spectrum.

Government response

21. Education Working for All! provided a blueprint to substantially and permanently improve the transition of all young people from education into sustainable, productive employment. The Government will now take this work forward through a seven year national programme to develop Scotland's young workforce, implementing the Commission's report jointly with COSLA. While we are looking to achieve much over the lifetime of the programme, we start from a strong position:

• Curriculum for Excellence allows for a blended and flexible approach to learning, where schools and their partners now have much greater flexibility to offer a wider range of pathways and options, including vocational qualifications, in line with modern labour market demands and which meet the needs of every learner;
• Reforms to college education have created a regionalised college structure, much more focussed on responding to regional labour markets with a greater emphasis than ever before on employment outcomes;
• Growth in the number of Modern Apprenticeship opportunities has seen the emergence of work-based learning that is valued by both employers and young people;
• Scotland has a strong system of vocational qualifications that are informed by and recognised by employers across all sectors, underpinned by the well-established Scottish Credit and Qualifications Framework ( SCQF);
• Scotland's approach to career services, much better informed by labour market information and delivered through a range of channels, provides better basis for young people to make decisions about their future;
• Opportunities for All, a critical measure put in place by Government at the height of the recession. This ensures that all 16-19 year olds are guaranteed an offer of a place in learning and provides a strong platform for our ambition to introduce the European Youth Guarantee ( EYG) in Scotland. However it remains disappointing that the recommendations within Lord Smith's report falls well short of the proposals we would require to be able to fully implement the EYG;
• The move to a more flexible, labour market responsive approach to employability training through the introduction of the Employability Fund has improved the support we offer those experiencing unemployment. Again this approach can be enhanced with the devolution of more powers to the Scottish Parliament.

22. Moving forward we need to build on this strong base to develop an approach to vocational education and training and to youth employment which will position us among the best performing countries in Europe.

23. As well as implementing a wide range of ambitious system changes we need to see significant cultural changes over the lifetime of the implementation programme.

24. Access to free higher education is a key element of our approach to developing a fairer society in which all can contribute to economic success and share its benefits. In parallel we need to address any misperceptions about the economic and social benefits of a strong vocational education and training system.

Setting the ambition, measuring progress

25. In setting out our initial response to the report, the Scottish Government committed to its headline target to reduce youth unemployment by 40 per cent by 2021. We have also, in line with the Commission's proposed approach, developed 11 key performance indicators reflecting those areas where we particularly need to focus our efforts. They are listed at annex B.

26. The Government will publish an annual report on our progress in relation to implementing the developing the young workforce programme, which will evidence the year on year progress towards these headline targets.

Investing

27. The Government acted quickly to put early implementation funding in place. In 2014/15 £12 million of additional funding was allocated to support a package of early action. A further £16.6 million has been allocated in the draft Scottish budget for 2015/16. This will help begin the work required to develop and test new approaches.

28. Over the lifetime of the programme we need to consider how core provision and funding across the education and training system is applied to meet the demands arising from this programme of activity. This will require a genuine move to the more collaborative use of mainstream resources, as called for by the Commission. Our early work with local authorities, colleges, government agencies and employers provides a strong basis for achieving this move.

Working with partners

29. Key to the success of our approach will be in pooling the efforts and commitment of partners across national and local government, the wider public sector - in particular with Education Scotland, Skills Development Scotland, the Scottish Funding Council and with employers. There are many individuals and organisations showing leadership on this agenda, and the part they are playing in the National Advisory Group and Programme Board which will oversee the Developing the Young Workforce Programme, together with the National Invest in Young People Group leading business engagement in education across the country, is invaluable. Membership of these groups is outlined at annex C.

Engaging people

30. Key to success is the dialogue with those who influence young people, including parents, carers, careers advisors, teachers and practitioners, as well as young people themselves. A focussed and sustained approach to engagement and communication which involves people in the development and delivery of these changes will feature throughout our planned activity.

31. Employers are central to this effort. As well as supporting their greater engagement with education, Government will encourage employers to place recruitment of young people at the heart of their approach to workforce planning and to adapt their recruitment policies accordingly. The Commission's conclusion was that there is an appetite among many employers for this, recognising that it is in their interests to take a much more active role in the development of the young workforce. This has been borne out by the Government's own consultations with industry.

32. We already benefit in Scotland from a strong sense of cohesion - of partnership working between government and business. We want to continue to strengthen this by working with employers of all types and the trade union movement across our implementation programme, placing an early focus on the implementation of the Commission's employer recommendations. We will seek to build on the strong response to the Commission's final report from Scotland's employer community.

Fair access to opportunities

33. The Commission's report explored many of the real equality issues which impact on the choices young people make while they are still in the education system and subsequently impact on their long term prospects when they move into the workforce.

34. This part of the Commission's report highlighted a number of cultural factors which we all need to work together to address. This is important as we seek to harness all of the talent at our disposal to build economic prosperity and enable young people of all backgrounds to take their rightful place in a stronger, fairer and more equitable society.

35. Higher skill levels, greater participation in the labour market across all groups and reducing inequality across all areas of Scotland will be key measures of our efforts to strengthen our economy. As a society we will do better if we can benefit from the skills, talents and innovation of all our people. That is why we are committed to enabling everyone to participate fully in the workforce, especially groups that are currently underrepresented.

Implementation

36. In the following sections - covering the contributions from schools, colleges, the apprenticeship programme, and employers, and considering the total programme impact on ensuring fair access to these opportunities - we set out more fully how and when, in partnership with local government, we will implement the Commission's recommendations and take forward our programme to develop Scotland's young workforce. Throughout our aim will be to create a reduction in youth unemployment by 2021 which can sustain changes in the economic cycle.